Merck & Co. disclosed that the U.S. Justice Department, apparently as part of a criminal investigation, subpoenaed the company for information on Merck's blockbuster arthritis drug Vioxx, recently withdrawn from the market, and the Securities and Exchange Commission began an informal inquiry into the withdrawal. The Justice Department sought information on Merck's research, marketing and sales activities related to Vioxx, the company said in its quarterly financial filing. Merck said it was cooperating with both investigations but could not predict their outcomes. Unfavorable results "could have a material adverse effect on the company's financial position, liquidity and results of operations," it said.
Merck is defending itself against numerous shareholder and class-action lawsuits related to Vioxx, which the company voluntarily pulled from the market in September after a study confirmed that the drug increased the risk of heart attack and stroke among longtime users. Merck said it had product liability insurance to cover personal injury lawsuits of up to approximately $630 million after deductibles and co-insurance. The company said it believed it also had at least $190 million in directors' and officers' insurance for Vioxx lawsuits but could not say if the insurance would be adequate to cover its defense costs. -- by Cinda Becker